Hey, HP, the Smartphone Market Is Calling

Hewlett-Packard CEO Mark Hurd last week said his company has no plans to aggressively move into the smartphone business, following the $1.2 billion acquisition of Palm. Which means HP is about to miss out on a tremendous opportunity to become a major player in mobile — and the move could hamper the company’s efforts in the larger world of connected devices.

As I discuss in my weekly column over at GigaOM Pro (sub req’d), this seeming indifference to the booming smartphone market is inexplicable, and it could actually harm HP’s long-term goal of churning out a variety of interconnected devices.

It’s true that the coming wave of connected devices will present enormous opportunities for developers and manufacturers. And I understand that the smartphone business is a crowded space where three dominant platforms (Android, BlackBerry and iPhone) are fending off a host of challengers. The field will get even more congested later this year when Microsoft trots out its Windows Phone 7 operating system.

But the smartphone market is growing twice as quickly as the overall mobile market, according to IDC, and it will continue to expand dramatically over the next few years, meaning there’s plenty of opportunity for the smaller guys. And smartphones — along with their attendant app stores — will encourage adoption of the applications that help drive demand for those interconnected devices, in the same way that Apple’s iPad and iPod touch are extensions of its iPhone business.

HP now has the technology and the carrier ties to learn from Palm’s mistakes and build out an applications business that is built on smartphones but that also drives demand for other connected gadgets from HP.

Growing its developer community would allow the company to build out its webOS Application Catalog, which still offers just a fraction of the number of titles carried by Apple’s App Store or Android Market. (And HP will have to spur development of webOS apps regardless of its plans in the smartphone business.) The meager portfolio of webOS devices needs to be expanded with fresh, new handsets. And HP may want to do away with the webOS brand, which has mindshare among techies and some early adopters but simply doesn’t have the consumer appeal of catchier names like iPhone or Android.